Private Health Insurance (Benefit Requirements) Amendment Rules 2013 (No. 2)

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Health

Private Health Insurance Act 2007

Private Health Insurance (Benefit Requirements) Amendment Rules 2013 (No. 2)

Authority

Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Benefit Requirements) Rules providing for matters required or permitted by Part 3-3 of the Act, or necessary or convenient to be provided in order to carry out or give effect to Part 3-3 of the Act.

The Private Health Insurance (Benefit Requirements) Amendment Rules 2013 (No. 2) (the Amendment Rules) consist of four Schedules (A, B C and D), which amend Schedules 1-5 of the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on 1 November 2011.

Purpose

Schedule A of the Amendment Rules

The purpose of Schedule A to the Amendment Rules is to make changes to the minimum benefits for hospital accommodation in Schedule 1, 2 and 3 of the Principal Rules to reflect increases in the Consumer Price Index (CPI) from March 2013 to March 2014.  The accommodation components in Schedule 1, 2 and 3 are subject to annual review and are amended with reference to the CPI movements from March to March each year. In the year from March 2013 to March 2014, there was an increase of 2.50% in the Australian CPI. 

The increase in minimum benefits for hospital accommodation in Queensland differ.  These benefits are indexed based on the Brisbane March 2013 to March 2014 CPI.  In the year from March 2013 to March 2014, there was an increase of 2.1% in the Brisbane CPI.

Schedule B of the Amendment Rules

The purpose of Schedule B to the Amendment Rules is to make amendments to Schedule 4 of the Principal Rules.  The amendments reflect the changes in the minimum benefits for hospital treatment for patients who are classified as “nursing-home type patients” (NHTPs) at public hospitals in the Australian Capital Territory (ACT), South Australia (SA) and Western Australia (WA).

Schedule C of the Amendments Rules

The purpose of Schedule C to the Amendment Rules is to amend Schedules 1and 3 of the Principal Rules to insert two Medicare Benefits Schedule (MBS) item numbers and remove two MBS item numbers.  The updates reflect the changes made by the Health Insurance (General Medical Services Table) Amendment Regulation 2013 (No. 1) which commenced 1 May 2013 and the changes to the MBS which take effect from 1 July 2013.  

Schedule D of the Amendment Rules

The purpose of the amendments provided in Schedule D is to update the reference to the latest Second Tier Advisory Committee-approved list. The list of facilities eligible for second tier default benefits is the list existing at the time of this amendment and is published on the Department of Health and Ageing’s website at http://www.health.gov.au/

Background

The Principal Rules, which commenced on 1 November 2011, provide for the minimum benefit requirements for psychiatric, rehabilitation and palliative care and other hospital treatment.  Schedules 1 to 5 of the Principal Rules set out the minimum levels of benefit which are payable for hospital treatment.  Namely, benefits for overnight accommodation (Schedules 1 and 2), same day accommodation (Schedule 3), nursing-home type patients (Schedule 4) and second tier default benefits (Schedule 5).

Schedule 1 categorises MBS item numbers into overnight patient classifications comprising ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Surgical patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patients’.  Schedule 3 sets out MBS item numbers for the same day hospital accommodation benefits which are payable for privately insured patients in all states and territories.

The minimum benefits payable per night for hospital treatment provided to NHTPs in Schedule 4 of the Principal Rules is subject to review and change twice annually, to reflect the indexation applied to the Adult Pension Basic Rate and Maximum Daily Rate of Rental Assistance.  The latest indexation of these rates becomes effective on 1 July 2013.

Schedule 5 of the Principal Rules requires a health insurer to pay second tier default benefits for most episodes of hospital treatment provided in private hospital facilities that are specified in Schedule 5 if the health insurer does not have a negotiated agreement with the hospital.  Schedule 5 sets a higher minimum level of benefit (for overnight treatment and day only treatment provided in specified facilities) than the minimum benefit set for such treatment by Schedules 1, 2 and 3 of the Principal Rules.

Details

Details of the Amendment Rules are set out in the Attachment.

Consultation

Schedule A of the Amendment Rules

On 16 May 2013, the Australian Government Department of Health and Ageing (the Department) advised States and Territories of its intention to increase minimum private health insurance benefits for private hospital accommodation as a consequence of CPI movements for the period March 2013- March 2014.  All States and Territories, except the Northern Territory, responded to the Department confirming the new rates that would apply in their jurisdictions in respect of public shared ward accommodation for private patients from 1 July 2013.

Schedule B of the Amendment Rules

On 25 February 2013, the Department consulted with States and Territories and invited them to advise of their intention to adjust NHTP default benefits in line with twice annual changes to the Adult Basic Pension Rate and Maximum Daily Rate of Rental Assistance.  New South Wales, Queensland and Tasmania provided responses to the Department in March 2013 and the NHTP minimum benefits in those jurisdictions were increased effective from 20 March 2013.  The ACT, SA and WA subsequently wrote to the Department seeking an increase to the NHTP minimum benefits for effect from 1 July 2013.

Schedule C of the Amendment Rules

In accordance with changes to the MBS, two MBS item numbers have been added and two MBS item numbers have been deleted.  Medical advice was sought from within the Department regarding these amendments.  No further consultation was undertaken because the amendments are minor in nature and do not significantly affect existing arrangements.

Schedule D of the Amendment Rules

Consultation for changes to Schedule 5 occurred with industry through the Second Tier Advisory Committee (the Committee), which includes equal representation from both private hospital and private health insurance sectors.  Facilities wishing to be considered for inclusion in Schedule 5 were individually assessed and decided by the Committee. 

The Amendment Rules commence on 1 July 2013 or, if registered after 1 July 2013, the day after registration.

The Amendment Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Authority: Section 333-20 of the

Private Health Insurance Act 2007

MEDICAL BENEFITS DIVISION

DEPARTMENT OF HEALTH AND AGEING

JUNE 2013

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2013 (No. 2)

Section 1 Name of Rules

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2013 (No. 2) (the Amendment Rules).

Section 2 Commencement

Section 2 provides that the Amendment Rules are to commence on 1 July 2013 or, if registered on a later date, the day after registration.

Section 3 Authority

These Rules are made under item 3A of the table in section 333-20 of the Private Health Insurance Act 2007.

Section 4  Schedule

Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule A – Amendments

Item 1 – Schedule 1, Subclause 2(2) Minimum benefit, Table 1

Schedule 1 of the Rules sets out the minimum benefit payable per night for patients in private hospitals in all States/Territories and shared ward accommodation at public hospitals in Victoria and Tasmania, providing that the patient is not classified as a nursing-home type patient.

Item 1 of the Schedule to the Amendment Rules increases the minimum benefit per night for private hospitals in all States/Territories in subclause 2(2), Table 1:

Advanced surgical patient

- first 14 days  From: $384 to $394

- over 14 days  From: $266 to $273

Surgical patient or obstetric patient

- first 14 days  From: $356 to $365

- over 14 days  From: $266 to $273

Psychiatric patient

- first 42 days  From: $356 to $365

- 43 – 65 days  From: $309 to $317

- over 65 days  From: $266 to $273

Rehabilitation patient

- first 49 days  From: $356 to $365

- 50 – 65 days  From: $309 to $317

- over 65 days  From: $266 to $273

Other patients

- first 14 days  From: $309 to $317

- over 14 days  From: $266 to $273

Item 2 – Schedule 1, Subclause 2(2) Minimum benefit, Table 2

Item 2 of the Schedule to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at Victorian public hospitals in subclause 2(2), Table 2:

Advanced surgical patient

- first 14 days  From: $384 to $394

- over 14 days  From: $266 to $273

Surgical patient or obstetric patient

- first 14 days  From: $356 to $365

- over 14 days  From: $266 to $273

Psychiatric patient

- first 42 days  From: $356 to $365

- 43 – 65 days  From: $309 to $317

- over 65 days  From: $266 to $273

Rehabilitation patient

- first 42 days  From: $356 to $365

- 43 – 65 days  From: $309 to $317

- over 65 days  From: $266 to $273

Other patients

- first 14 days  From: $309 to $317

- over 14 days  From: $266 to $273

Item 3 – Schedule 1, Subclause 2(2) Minimum benefit, Table 3

Item 3 of the Schedule to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at Tasmanian public hospitals in subclause 2(2), Table 3:

Advanced surgical patient

- first 14 days  From: $384 to $394

- over 14 days  From: $266 to $273

Surgical patient or obstetric patient

- first 14 days  From: $356 to $365

- over 14 days  From: $266 to $273

Psychiatric patient

- first 42 days  From: $356 to $365

- 43 – 65 days  From: $309 to $317

- over 65 days  From: $266 to $273

Rehabilitation patient

- first 42 days  From: $356 to $365

- 43 – 65 days  From: $309 to $317

- over 65 days  From: $266 to $273

Other patients

- first 14 days  From: $309 to $317

- over 14 days  From: $266 to $273

Item 4 – Schedule 2, Clause 2 Minimum benefit, Table

Schedule 2 of the Rules sets out the minimum benefit payable per night for patients in shared ward accommodation at public hospitals in the Australian Capital Territory (ACT), New South Wales (NSW), Northern Territory, Queensland, South Australia and Western Australia, providing that the patient is not classified as a nursing-home type patient.

Item 4 of the Schedule to the Amendment Rules increases the minimum benefit per night for shared ward accommodation at ACT, NSW, Queensland, South Australia and Western Australian public hospitals in clause 2, Table:

• ACT   From: $318 to $326;
• NSW   From: $318 to $326;
• Queensland  From: $324 to $331;
• South Australia  From: $318 to $326; and
• Western Australia From: $318 to $326.

It is noted that there is no change to the minimum benefit for the Northern Territory.

Item 5 – Schedule 3, Part 1, Subclause 2(2) Minimum benefit, Table 1

Schedule 3 of the Rules set out the minimum benefit payable for same-day accommodation patients in all the State/Territory hospitals, providing that:

1. hospital treatment is classified as a type B procedure; and
2. the patient is not classified as a nursing-home type patient.

Item 5 of the Schedule to the Amendment Rules increases the minimum benefit for same-day accommodation in public hospitals in NSW, ACT, Queensland, South Australia, Tasmania, Victoria and Western Australia in subclause 2(2), Table 1:

It is noted that there is no change to the minimum benefit for the Northern Territory.

Item 6 – Schedule 3, Part 1, Subclause 2(2) Minimum benefit, Table 2

Item 6 of the Schedule to the Amendment Rules increases the minimum benefit per night for same-day accommodation in all State/Territory private hospitals in subclause 2(2), Table 2:

Schedule B – Amendments

Item 1– Schedule 4, Clause 6 Minimum benefit, Table 1

Schedule 4 of the Rules sets out the minimum benefit payable per night for patients that are classified as nursing-home type patients in hospitals. 

Item 1 of the Schedule to the Amendment Rules increases the minimum benefit per night for public hospitals in the following State and Territories in clause 6, Table 1:

• SA                 From $108.00 to $111.00
• ACT    From: $107.40 to $111.20
• WA    From: $116.05 to $125.45

Schedule C – Amendments

Item 1 – Schedule 1, Part 2, Type A procedures, Subclause 4(3) Advanced Surgical Patient

Item 1 amends Schedule 1, Part 2, subclause 4(3) of the Principal Rules by deleting MBS item number 30512.

Item 2 – Schedule 1, Part 2, Type A procedures, Subclause 6(3) Surgical patient

Item 3 amends Schedule 1, Part 2, subclause 6(3) of the Principal Rules by deleting MBS item number 30511.

Item 3 – Schedule 3, Part 3, Type C procedures, Clause 8, Category 3 Therapeutic Procedures, T8

Item 3 inserts two new MBS item numbers (32523 and 32526) into Type C, Category 3 Therapeutic procedures, T8.

Schedule D – Amendments

Item 1 – Schedule 5, Clause 4 Facilities, Paragraph (1)

Item 1 of Schedule D to the Amendment Rules updates the reference to the latest Second Tier Advisory Committee-approved list. The list of facilities eligible for second tier default benefits is the list existing at the time of this amendment and is published on the Department of Health and Ageing’s website at http://www.health.gov.au/